Read our FAQs on how the Coronavirus (Covid-19) can impact…
The COVID-19 pandemic has had a huge impact on our daily lives.
From wearing masks to working from home, everyone is slowly adjusting to the ‘new normal’.
Many have also had to make adjustments to their financial planning and have been looking to secure the right financial protection for their loved ones during these uncertain times.
But what impact has Coronavirus had on the life insurance industry?
Thankfully, it’s still completely possible to:
In this article, we’ll put to rest many common myths surrounding Coronavirus and life insurance, as well as help you understand your life insurance options.
Speak to an expert
If you have any concerns regarding life insurance and Coronavirus, a member of our friendly team will be happy to help.
Whether you’re looking for cover or just need some questions answered, we can provide you with the information you need to make a fully informed decision.
Our award-winning service is FCA regulated, and our quotes are fee-free.
The information in this article is correct as of 17/12/2020
Keep reading for our full Coronavirus life insurance guide…
Yes, it’s completely possible to secure family life insurance during the Coronavirus pandemic.
Insurers have simply added new questions regarding COVID-19 to their underwriting processes to protect themselves against this new risk.
As well as providing the standard information regarding:
You’ll also be asked questions related to Coronavirus, such as:
Symptoms can include (but are not limited to) a new and continuous cough, high temperature, loss of or change to taste or smell, etc.
As the underwriting process varies between insurers the questions asked may also vary.
Just because you answer yes to any of these questions doesn’t mean your application will be declined.
If you’ve experienced symptoms of the virus, have tested positive, are awaiting results from a Coronavirus test or have had to isolate within 30 days prior to your application, it’s likely that your application will be postponed (rather than declined).
It’s extremely important to be honest regarding information about Coronavirus symptoms, test results, possible exposure to the virus and isolation requirements at the point of application.
It’s considered insurance fraud to not be completely truthful on your application and it can lead to your selfless investment being wasted as insurers can deny a pay out.
If you have no symptoms and are healthy, it’s likely your application will be accepted with no issues.
The exception to this is an over 50s plan. Due to the nature of the policy, you won’t need to provide any medical information.
Can I buy life insurance if I have Coronavirus?
Yes, you can still purchase a life insurance policy if you have Coronavirus.
It’s a common misconception that you’ll automatically be declined life insurance due to testing positive for Coronavirus.
Instead, insurers are more likely to postpone your application until you’ve made a full recovery.
How long the postponed period will be will depend on the insurer, some may ask you to wait a few weeks, whereas with others it could last a few months.
But rest assured, you’ll still be able to secure cover to protect your loved ones.
Yes, Coronavirus can be covered by a life insurance policy.
If you have an existing life insurance policy, you’ll be covered for death due to Coronavirus as per the terms and conditions of your policy.
New policies taken out will also cover death due to Coronavirus but claims may be liable to the contestability clause.
This is a clause written into the policy that allows insurers to request more information about the death.
If you pass away due to Coronavirus and your loved ones make a claim, insurers may look into the death to see if Coronavirus was present at the point of application.
If it’s found that the policyholder knowingly had Coronavirus at the point of application but didn't disclose this information, a pay out will be denied. This is known as 'non-disclosure'.
When it comes to life insurance, honesty is always the best policy.
It’s unlikely you’ll be declined for having Coronavirus and it’s completely possible to secure affordable cover after your postponed period has passed.
If you have any concerns, a member of our friendly team can talk you through all of your policy options.
No, insurers aren’t currently adding Coronavirus as an exclusion in new policies.
However, if your policy was recently taken out, and you pass away, insurers may need to request more information to see if COVID-19 was pre-existing at the time of application.
While it’s rare, some older policies may include a ‘pandemic’ exclusion.
You may wish to check the terms and conditions of your policy or speak to your provider.
What is an exclusion?
An exclusion is a circumstance or situation that’s written into the terms and conditions of your policy, which means in the event of this situation or circumstance happening, a pay out won't be made to your loved ones.
For example, if you have a pre-existing medical condition, an exclusion for this condition (and any related conditions) may be added to your policy.
If you pass away as a result of this condition (or any of the related conditions) a pay out won't be made.
Yes, it’s possible for a claim to be made on your life insurance policy if you pass away due to Coronavirus.
Yes, if you pass away due to Coronavirus it’s possible for your loved ones to receive a pay out.
Only in certain rare circumstances will a pay out be denied;
As long as all the correct information was given at the point of application, it’s completely possible for your loved ones to receive a pay out if you pass away due to Coronavirus.
The pay out received by your loved ones can help to reduce financial stress and help them to meet their new obligations.
A life insurance pay out can take care of:
There’s no life insurance product called ‘Coronavirus cover’.
However, a standard life insurance policy can cover death due to Coronavirus (as well as many other causes of death).
Typically, there are four main life insurance options you can choose from.
Level term life insurance
Level term life insurance provides a fixed sum assured (pay out amount). You’ll be covered for a specified period of time (this can be up to 40 years) and if you pass away during this time a pay out will be made to your loved ones.
Due to the large pay out potential, level term life insurance can be used to cover large debts (such as an interest-only mortgage), family living costs, as well as funeral expenses.
Decreasing term life insurance
With decreasing term life insurance your sum assured will reduce over time.
You’ll be covered for an agreed period of time and a pay out will be made if you pass away during this time.
Decreasing term life insurance is ideal for protecting a repayment mortgage as you can have your policy term match up with your mortgage term.
This way your sum assured will reduce inline with your remaining mortgage balance.
Whole of life insurance
Whole of life insurance provides lifetime cover and, therefore, guarantees your loved ones a pay out when you pass away.
Your sum assured will remain fixed throughout the lifetime of your policy.
Whole of life insurance is a great option for guaranteeing your loved ones an inheritance.
However, because you need to pay premiums for life and no one knows how long this will be, it's possible to pay more into a whole of life policy than it will pay out.
Over 50s plan
An over 50s plan guarantees acceptance to UK residents aged 50 - 85, with no medical information required.
For this reason, you won’t need to answer any COVID-19 related questions during the application process.
An over 50s plan is a great option for those in this age bracket who have struggled to secure cover in the past (due to Coronavirus or any other pre-existing conditions).
However, due to the unknown risk you pose, it’s likely your sum assured will be capped (typically at around £20,000).
It’s also likely there will be a waiting period added to your policy. This is usually the first 12 - 24 months of your policy where if you pass away due to natural causes, no pay out will be made (however, you’ll be covered for accidental death).
Insurers aren’t currently adding Coronavirus as an exclusion on any new policies, so if you take out any of the above policies, you’ll be covered for death due to Coronavirus (as long as all the information given at the point of application is correct).
Our award-winning team are just a phone call away and will be able to take you through the whole process of securing life insurance, as well as answer any questions you may have.
Why not get in touch for your FREE quotes?
It’s unlikely that you’ll be charged more for your monthly premium due to Coronavirus.
Those with existing policies won’t see an increase to their premium, as their premium amount was agreed at the point of application.
It’s unlikely that those taking out new policies will experience inflated premiums due to Coronavirus.
Premiums are still being calculated in the standard way, using information regarding:
These factors, along with your level and length of cover, will be assessed and your premium will be calculated accordingly.
Life insurance taken out through Reassured starts from as little as 20p-a-day † .
If you’re a key worker, it’s likely you’ll receive some form of cover in the form of an employee benefit (such as death in service).
This will pay out a percentage of your salary should you pass away during your employment with an employer who offers this benefit.
For example, NHS employees who contribute to the NHS pension scheme will have access to death benefits.
Due to the increased risk of catching Coronavirus, frontline NHS and care workers may also benefit from the Coronavirus Life Assurance Scheme.
This offers £60,000 to the families of frontline workers in this scheme who pass away due to Coronavirus.
A personal life insurance policy can help to add an extra layer of protection to ensure all costs are covered for your loved ones.
While death in service and the Coronavirus Life Assurance Scheme offer generous pay outs, it’s unlikely they would cover large expenses such as paying off the mortgage in full.
A personal life insurance policy could help take care of these large costs and ensure your loved ones can pay the rent or mortgage and remain in the family home.
Read our full life insurance for NHS nurses to find out about all of your options.
It’s not compulsory for you to take a Coronavirus test before you apply for life insurance but you may wish to in order to give the most honest answers during the application process.
Due to new underwriting processes taken on by insurers, you’ll be asked a number of COVID-19 related questions.
By having a recent test result, you can more accurately answer these questions and there’s no risk of non-disclosure
Critical illness cover is an additional layer of protection that can be added to a life insurance policy for an additional cost.
It will allow you to make an early claim on your policy if you’re diagnosed with a life-changing illness.
Unfortunately, Coronavirus won’t be on the list of illnesses covered by a critical illness policy.
This is because the Coronavirus is a new strand of illness.
However, if you’ve had Coronavirus which has lead to other complications (such as lung failure, respiratory problems or heart problems), some insurers will allow you to make a claim for this illness (if the illness is listed within your policy).
Each insurer will have a different list of illnesses that they cover within critical illness cover, so you may need to check your policy terms and conditions.
All term policies taken out through Reassured come with terminal illness cover.
This means you’ll be able to make an early claim on your life insurance policy if you’re diagnosed with a terminal illness and are predicted to pass away within 12 months.
Your pay out can be used to fund private medical treatments or you can use the money to enjoy your remaining time with your loved ones.
Coronavirus isn’t classed as a terminal illness and, therefore, you won’t be able to make a claim on your terminal illness cover for Coronavirus.
However, you’ll be protected should you fall ill with a life-threatening illness in the future.
As well as life insurance, you may want to take out additional layers of protection during this unpredictable time. You may want to consider:
Income protection is a form of financial protection that will make regular income payments if you’re unable to work due to sickness or injury. Some policies also cover unemployment.
These payments will often be a percentage of your salary and they can help to ease financial stress if you’re unable to work for a prolonged period of time.
This can be especially beneficial for those who are self-employed and who won’t experience sick pay from an employer or won’t benefit from the government furlough scheme.
If you need to make essential travel trips abroad (for business or personal reasons) travel insurance is essential in protecting you should you fall ill with the Coronavirus (or any other illness) while you’re away.
However, you’ll need to keep up to date with travel restrictions. If you intend on travelling to a country or area that isn’t permitted by the government guidelines, you may not be able to make a claim on your policy.
Travel insurance will help to cover medical expenses such as hospital visits and treatments so you won’t be left out of pocket having to pay for expensive medical care in a foreign country.
The coronavirus pandemic in the UK has drawn attention to the importance of having the right financial protection in place to protect your loved ones should the worst happen.
In these uncertain times, many want the peace of mind that their loved ones will be taken care of financially if they were to pass away.
Life insurance is just one of the ways of securing the financial future of your loved ones.
Our award-winning life insurance broker service has been helping families find suitable cover for over a decade.
We do the hard work by comparing life insurance quotes without charging you a fee.
Even if you have fallen on hard times, our team of experts can find you the most affordable cover.
Why not get in touch for your free, no-obligation quotes?
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